APA Group a $13bn Chinese takeover target

APA Group a $13bn Chinese takeover target

The giant Hong Kong-based investment and energy business CK Infrastructure has launched a $13-billion takeover of Australia's largest gas network operator APA.

APA says it received an unsolicited proposal from a consortium led by CK Infrastructure Holdings Limited, made up of CK Asset Holdings Limited and Power Assets Holdings Limited.

The proposal offers a 33 per cent premium to the $8.27 price prior to Wednesday's market open.

APA has agreed to let CKI undertake due diligence, noting that "it has a very attractive business and is well positioned. irrespective of whether the proposal proceeds to an offer". The company has offered to divest all of APA's Western Australian gas pipeline assets before or following the acquisition. A 50 ASX-listed company, it delivers about half of the nation's gas and has 15,000 kilometres of pipelines connecting 1.3 million homes and businesses. According to ABC News, the CK Infrastructure bid will certainly attract the attention of the competition authorities given its stake in Envestra, as well as its majority ownership in yet another gas pipeline operator, DUET Group, which the Chinese company bought for US$5.6 billion (A$7.4 billion) previous year.

Victor Li makes US$10 billion bid for Aussie gas pipeline firm
APA Group a $13bn Chinese takeover target

"In respect of the ACCC", the consortium said it had offered to sell APA's Goldfields and Parmelia gas pipelines and the Mondarra gas storage facility.

APA chairman Michael Fraser said the board would continue to evaluate the proposal, which includes - but is not conditional upon - the divestment of several gas assets.

Although the bid is preliminary, CK Infrastructure has already addressed potential competition concerns on the part of the Australian Competition and Consumer Commission and the Foreign Investment Review Board.

It also marks Victor Li's emergence from the shadow of his father, a Hong Kong rags-to-riches legend nicknamed "superman" for his deal-making prowess who retired at the conglomerate's annual meeting in March at the age of 89.

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